When David L. Cohen, the executive vice president of Comcast Corp., buttonholes policymakers to talk up his company’s proposed $45 billion merger with Time Warner Cable Inc., the first thing he says is that the deal won’t reduce competition in any U.S. geographic market. He’s right, at least when it comes to pay-TV services. After all, the large cable companies long ago divided the country among themselves so that no two of them compete in any one market.
But then, Comcast is adept at making a virtue out of a highly suspect premise. The 174-page public-interest report it filed Tuesday with the Federal Communications Commission to support its merger plan is replete with examples of its skill.
You may remember Comcast’s last big merger, with NBC Universal Inc. in 2011. At the time, Comcast asserted that the deal couldn’t hurt the market because it was a vertical combination — combining programming with distribution — and so was bound to create helpful efficiencies. “Vertical combinations with limited horizontal issues generally do not threaten competition,” Comcast Chief Executive Officer Brian Roberts told the House Committee on Energy and Commerce in 2010.
Now that Comcast is planning to combine its distribution networks with those of Time Warner Cable, it claims (via a television, radio, print and online campaign) that there couldn’t possibly be any harm because this arrangement is a fully horizontal deal. With greater scale, the combined company will achieve increased efficiencies and synergies, Comcast says. Not that any of those efficiencies will be passed on to consumers: “We’re certainly not promising that customer bills are going to go down or even increase less rapidly,” Cohen says.
Because the benefits of a Comcast-Time Warner Cable deal are not obvious — last month, 52 percent of Americans said they thought it would result in less competition — Comcast also presented, in Tuesday’s statement, a list of additional gifts to the public interest. But each of these supposed benefits comes with a price.